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Performance Evaluation of Indian Railway Zones Using DEMATEL and VIKOR Methods
Performance Evaluation of Indian Railway Zones Using DEMATEL and VIKOR Methods
www.emeraldinsight.com/1463-5771.htm
BIJ
23,1
Performance evaluation of Indian
Railway zones using DEMATEL
and VIKOR methods
78 Rajeev Ranjan
Received 15 September 2014
Department of Production Engineering, Jadavpur University, Kolkata, India
Revised 20 June 2015 Prasenjit Chatterjee
Accepted 20 June 2015
Mechanical Engineering Department, MCKV Institute of Engineering,
Howrah, India, and
Shankar Chakraborty
Department of Production Engineering, Jadavpur University, Kolkata, India
Abstract
Purpose – The purpose of this paper is to propose the application of a decision-making tool for
performance evaluation of Indian Railway zones. It basically seeks to analyze the effects of various
evaluation criteria on the performance of Indian Railways using a combined multi-criteria decision-making
approach which employs decision-making trial and evaluation laboratory (DEMATEL) and
“VIse Kriterijumska Optimizacija kompromisno Resenje” (VIKOR) methods.
Design/methodology/approach – The performance of 16 Indian Railway zones is first evaluated
using DEMATEL method which addresses the inter-relationships between different criteria with
the aid of a relationship structure. The VIKOR method which is a compromise ranking approach
is then adopted to rank those candidate railway zones. Pareto analysis is also carried out to
identify the benchmark railway zones for the under/poor performers so as to improve their
operational excellence.
Findings – A numerical example from Indian Railways is illustrated and solved for better
understanding of the integrated decision-making tool in which the relevant information for the
considered railway zones with respect to different evaluation criteria are collected from various
websites and Indian Railways annual statistical report. Western and North-Eastern zones, respectively,
take the first and the last positions in the derived ranking list. The relevance of selecting different
performance indices/evaluation criteria is also discussed.
Practical implications – The application of this integrated methodology would serve as a
systematic approach for measurement of the aggregate operational performance of Indian Railway
zones so as to gain valuable academic and practical insights. It is also expected to provide an insightful
guidance to the railway administrators in taking valuable strategic decisions in promoting the service
of Indian Railways.
Originality/value – The integrated DEMATEL-VIKOR method is conceptually simple and easily
comprehensible which can consider numerous attributes simultaneously. This paper enables the
readers to gain some valuable inputs from a managerial perspective for Indian Railways to formulate
strategies for its zones to foster better performance.
Keywords Indian Railways, VIKOR, DEMATEL, Pareto analysis, Rank
Paper type Research paper
1. Introduction
Service sector or tertiary sector is frequently defined as one of the three major parts of
Benchmarking: An International
Journal economy in the “three-sector hypothesis” which divides economy into three main
Vol. 23 No. 1, 2016
pp. 78-95
areas. The other two major parts are the primary sector, which covers farming,
© Emerald Group Publishing Limited
1463-5771
mining and fishing, while the secondary sector covers manufacturing. The service
DOI 10.1108/BIJ-09-2014-0088 sector encompasses a wide array of activities ranging from services provided by
the most sophisticated sectors, like telecommunications to other services, like Performance
retail, banks, hotels, real estate, education, health, social work, computer services, evaluation
recreation, media, electricity, gas and water supply; highly capital intensive
services, like civil aviation and shipping to employment-oriented activities, like
of Indian
tourism and housing; and infrastructure-related activities, like road, rail and air Railway zones
transports and ports. The service sector plays an important role for the development
of a nation’s economy and human resources. Efficient transport is a critical 79
component for a nation’s national and global economic development. Transport
accessibility influences global development patterns and can be a boost or an obstacle
to the economic growth of a nation.
Indian economy has been sharing a common attribute in the composition of
its gross domestic product (GDP) in the form of growing contribution of its service
sectors. Rapid growth in service sectors during the past few years has further
strengthened its position as one of the leading sectors of Indian economy.
Service sectors now account for more than 60 percent of overall GDP in India
(Rath et al., 2007). Transport has affected economic development from the beginning
of human civilization. Since the era of industrial revolution, there has been a massive
demand for new transport facilities across the globe. Railway is an efficient transport
mode, concentrating people and goods, and transporting them over a fixed
route using one prime mover and multiple carriages and freight wagons. Indian
Railways is one of the largest systems in the world under a single management.
It is also one of the very few railway systems in the world generating operating
surpluses. Indian Railways started its journey in 1853 with a modest network, but
today, it has become an integral part of the entire nation. It has emerged today as
the main vehicle for socio-economic development of the whole country. It is a
self-propelled social welfare system, which has become the lifeline of the nation, and
can be appreciated to bring a population of 1.2 billion a little more closer. At present,
there are 17 zones in Indian Railways with each of them having its own division and
headquarter. Kolkata Metro has been the last addition to this list. It thus becomes
critical to evaluate the performance of all the railway zones in India, as Indian
Railways plays a decisive and significant role in the overall growth of the
Indian economy. Moreover, the fact that railway is still the most convenient and
cheapest mode of transportation in India makes this analysis all more important.
The importance of performance evaluation of railway zones can be explained from
the fact that it may help the Indian Railways in providing safer and secured journey
with improved service quality.
This sector attracts many researchers because the extracted results have the
potential to focus on the real picture/condition of Indian Railways. In this paper,
decision-making trial and evaluation laboratory (DEMATEL) method is first applied to
address the inter-relationships between the decision criteria with the aid of a
relationship structure. The weights of the considered criteria are determined using
Shannon’s entropy method (Rao, 2007). Finally, a compromise ranking of 16 Indian
Railway zones with respect to nine evaluation criteria is derived employing VIse
Kriterijumska Optimizacija kompromisno Resenje (VIKOR) method. The obtained
results may serve as a reference point to the decision/policy makers to choose the
best zone of Indian Railways with respect to the considered evaluation criteria. Western
zone is identified as the best performing zone having several positive dimensions.
On the other hand, North-Eastern zone has the worst performance along with some
major weaknesses, where special emphasis needs to be provided.
BIJ 2. Review of the past researches
23,1 Gathon and Pestieau (1995) introduced the idea that technical inefficiency measures
generally used to assess the performance of firms might not reflect the slack in
management and then applied the concept in European railways. Coelli and Perelman
(1999) adopted multi-output distance functions to investigate technical inefficiency in
European railways, and compared the results of three different methods, i.e. parametric
80 linear programming, corrected ordinary least square and data envelopment analysis
(DEA), which provided reassuring of similar information on the relative productive
performance of 17 railway organizations. Singh (2002) appraised the performance of
Kolkata Metro Railway, and suggested various measures to be taken for making it
viable and more profitable. It was also suggested to set up a unified Metropolitan
Transport Authority to look after all modes of transport apart from other useful
measures. Kaakai et al. (2007) developed a macroscopic simulation model of railway
transit stations based on hybrid petrinets. A performance evaluation methodology
based on analysis of making of the model was also explained through a real time case
study. Azadeh et al. (2008) presented an approach for performance improvement and
optimization of railway systems with multifaceted limitations, which would require
both qualitative and quantitative assessments. An integrated model with a
combination of DEA, analytic hierarchy process and computer simulation was
proposed for complex railway systems with severe limitations, different priorities and
multiple objectives. Employing DEA method, George and Rangaraj (2008) carried out a
performance benchmarking study of Indian Railway zones to develop an alternate
approach for measurement of aggregate operational performance of those railway
zones and envisage their operations in a supply chain perspective so as to gain
academic and practical insights. Yu and Lin (2008) proposed a multi-activity network
DEA (NDEA) model to decompose the performance of railways into passenger
technical efficiency, freight technical efficiency, service effectiveness and technical
effectiveness that would help in identification of sources of poor performance. Yu (2008)
investigated the efficiency and effectiveness for a group of 40 global railways in the
year 2002, using traditional DEA and NDEA. The results showed that the performance
measures were quite different in terms of magnitude, and even different DEA models
used to evaluate railway system performance could not distort the derived ranking of
the alternatives. Raghuram and Gangwar (2008) studied the issues and strategies
related to financial and physical aspects of revenue generating freight and passenger
traffic from 1987 to 2007 for Indian Railways. Jitsuzumi and Nakamura (2010) analyzed
the causes of inefficiency among 53 Japanese railway firms. The DEA model and total
factor productivity were incorporated to calculate the optimal subsidy levels for
individual organizations. Awasthi et al. (2011) proposed a hybrid approach based on
SERVQUAL and fuzzy TOPSIS methods for evaluating the quality of metro
transportation services of Montreal. Schittenhelm and Landex (2012) presented a series
of existing and newly developed key performance indicators for railway timetables.
Tahir (2013) analyzed the performance of Pakistan Railway in a multistage framework,
and applied DEA method to estimate product, earning and financial efficiency to
understand the decline in Pakistan Railway in comparison with Chinese and Indian
Railways. Havenga et al. (2013) indicated how benchmark analysis could be adopted to
inform a rail reform agenda for South Africa’s freight rail system. Bhanot and Singh
(2014) applied DEA approach to carry out a benchmarking study on the performance
indicators in Indian Railways container business and selected private players.
Kyriakidis et al. (2015) presented a framework to identify the most significant human
performance factors, known as performance shaping factors, which would influence the Performance
performance of railway operators. Laurino et al. (2015) reviewed the railways models evaluation
for 20 countries and analyzed those models to provide an ex-ante overview of the
current practices, both in quantitative and qualitative terms. It was identified that each
of Indian
country had developed its own framework according to its transport system, political Railway zones
context, economic situation, business and regulatory environment.
It is observed from the review of the past researches that very little work has been 81
carried out for appraising the performance of railway zones in Indian context. Till
date, only a few multi-criteria decision-making (MCDM) methods, specially DEA
approach have been mainly employed for dealing with the problem of performance
evaluation of railways. DEA is mainly used for benchmarking in operations
management, where a set of measures is selected to benchmark the performance of
manufacturing and service operations. It has several advantages, like there is no need
to explicitly specify a mathematical form for the considered function, it is proven to
be useful in uncovering relationships that remain hidden for other methodologies, it is
capable of handling multiple inputs and outputs, it is also capable of being used with
any input-output measurement, and the sources of inefficiency can be analyzed and
quantified for every evaluated unit. But, it has also some major disadvantages that
hinder its wide spread applications, such as the derived results are sensitive to the
selection of inputs and outputs, the best specification cannot be validated, the number
of efficient solutions on the frontier tends to increase with the number of inputs and
outputs, there is no account for measurement error/random noise, it is sensitive to
outlier data and it does not provide tests of the significance of input or output
variables included in the model (Ali and Lerme, 1997). Based on a huge set of
mathematical formulations (to be solved using a linear programming solver, like
LINDO), DEA method can only identify the efficient candidate solutions from the
available set of alternatives and it miserably fails to provide an entire preorder of the
considered alternatives for any performance evaluation problem. These drawbacks
and inefficiencies of DEA method have motivated to implement an integrated
DEMATEL-VIKOR method for performance evaluation of Indian Railway zones.
DEMATEL is applied to predict the inter-relationships between the considered
evaluation criteria while using a relationship structure. Unlike other MCDM methods,
it has the unique capability to segregate all the considered criteria into cause and
effect groups to have a better understanding of a performance evaluation problem.
On the other hand, a compromise ranking tool in the form of VIKOR method is
employed to derive an entire ranking list of the participating railway zones. VIKOR
method is quite easy to comprehend, has simple computational steps and has been
proven to provide almost accurate ranking results.
84 1
k¼ P ; i; j ¼ 1; 2; :::; n (2)
n
max j¼1 aij
1pipn
then:
T ¼ X ðI –X Þ1 (3)
Step 4: determination of the sums of rows and columns of matrix T.
In the total-relation matrix T, the sum of rows and sum of columns are represented
by vectors D and R, as derived using following equations:
" #
X
n
Di ¼ t ij ¼ ½t i n1 ; i ¼ 1; 2; :::; n (4)
j¼1 n1
" #
X
n
Rj ¼ t ij ¼ t j n1 ; j ¼ 1; 2; :::; n (5)
i¼1 1n
In VIKOR method, L1, i and L∞, i are used to formulate the ranking measure.
The procedural steps for VIKOR method are enlisted as follows (Opricovic and Tzeng,
2004, 2007):
(1) From the developed decision matrix for the considered problem, determine the
best, (xij)max and the worst, (xij)min values of all the criteria.
BIJ (2) Calculate the values of Ei and Fi:
23,1 h i
X
n xij max xij
E i ¼ L1;i ¼ wj h i (8)
j¼1 xij max xij min
86
8 h i 9
< xij max xij =
F i ¼ L1;i ¼ Maxm of wj h i j ¼ 1; 2; :::; n (9)
: xij max xij min ;
X
n
½xij ðxij Þmin
E i ¼ L1;i ¼ wj (10)
j¼1
½ðxij Þmax ðxij Þmin
where Ei max and Ei min are the maximum and minimum values of Ei,
respectively, and Fi max and Fi min are the maximum and minimum values of Fi,
respectively. The parameter v is introduced as weight of the strategy of
“the majority of attributes” (“the maximum group utility”). The value of v is
usually set by the decision maker, ranging between 0 and 1.
Practically, if the decision maker assumes v W 0.5, he/she gives more
importance to the first term in Equation (11) and hence, to the global
performance of the alternative in respect to the whole of the criteria. While using
a v value smaller than 0.5, he/she gives more weight to the second term that is
related to the magnitude of the worst performance exhibited by the alternative
with respect to each single criterion. When both these aspects are considered
equally relevant, v ¼ 0.5 should be used.
(4) Arrange the alternatives in ascending order, according to the values of Pi. The
best alternative is the one having the minimum Pi value.
The VIKOR method is an effective MCDM tool, specifically applicable to those
situations when the decision maker is not able, or does not know to express his/her
preference at the beginning of the decision-making process. The computational
procedure of VIKOR method is quite simple, and it offers a systematic and logical
approach to arrive at the best decision. The main advantage of VIKOR method
as compared to any other MCDM methods is that the final performance score in VIKOR
is an aggregation of all criteria, their relative importance, and a balance between total
and individual satisfaction. The compromise solution as provided by this method can
be the groundwork for negotiations, involving the decision maker’s preference on
criteria weights.
5. Performance evaluation of Indian Railway zones Performance
The combined DEMATEL-VIKOR method is adopted here to find out the ranking of evaluation
16 zones of Indian Railways with respect to nine evaluation criteria. Kolkata Metro has
been the last addition in the list of Indian Railway zones, but it is not considered here
of Indian
due to non-availability of pertinent information. Thus, the performance of 16 railway Railway zones
zones is evaluated with respect to nine decision criteria, as listed in Table II.
All these nine criteria are so selected that they are almost uncorrelated. 87
The relevant data for these criteria are accumulated for the year 2010-2011, except
the operating cost ratio, which is based on the figures from the year 2008-2009.
Among these criteria, the first five are beneficial (higher the better) and the remaining
four are non-beneficial in nature (lower the better). Route distance is an important
criterion in this evaluation process because it covers both rural and urban places in
India. The number of locomotives shows the strength of different Indian Railway
zones to reduce the operational down time. The total number of locomotives
encompasses all the diesel, steam and electric engines. The number of passengers
carried in a specific year is also an important criterion. Indian Railways carried
24 million daily passengers and 8,900 million annually in the year 2010-2011. Indian
Railways ranks ninth in the world in employment generation with almost 1.4 million
employees. So, number of staffs in a particular zone is selected as another criterion.
The number of major stations in each zone is selected as a beneficial criterion which
is adjudged as quite important for performance evaluation of Indian Railway zones.
Total number of accidents or derailment of trains is another criterion for which
minimum value is always desired. Indian Railways is trying to develop a new
technology so that train accidents or derailments can be substantially reduced.
The total number of persons injured or deceased in railway accidents is treated as the
next criterion for this performance appraisal process. More is the number of
accidents or derailments, more will be the number of persons injured or died. The
total expenditure of railway zones is treated here as another non-beneficial criterion.
The last non-beneficial criterion is the operating cost ratio (percent), which is the ratio
of total expenditure to total revenue for each railway zone. Table III shows the
decision matrix as developed for performance evaluation of 16 zones of Indian
Railways on the basis of nine criteria, where the relevant information for the railway
zones with respect to different criteria are collected from various websites and
published reports (www.wikipedia.com, Indian Railways Annual Statistical Report
2010-2011, etc.). The criteria weights are estimated using Shannon’s entropy method
(Rao, 2007), as shown in Table IV.
16 Indian
Table III.
evaluation of
Railway zones
Decision matrix
for performance
Sl. no. Railway zone C1 C2 C3 C4 C5 C6 C7 C8 C9
Table IV.
Criteria C1 C2 C3 C4 C5 C6 C7 C8 C9 Criteria weights for
performance appraisal
Weight 0.1465 0.1304 0.0642 0.1362 0.1372 0.1027 0.0075 0.1392 0.1362 of railway zones
Criteria C1 C2 C3 C4 C5 C6 C7 C8 C9
C1 0 0 3 4 2 4 3 4 4
C2 0 0 2 1 0 0 0 3 4
C3 3 4 0 4 4 3 3 4 4
C4 2 1 2 0 1 0 0 4 4
C5 2 3 2 3 0 0 0 4 4
C6 0 0 2 1 0 0 4 3 1
C7 0 0 2 0 0 3 0 3 2 Table V.
C8 1 1 2 2 2 2 2 0 4 Initial direct-relation
C9 1 1 1 3 3 0 0 3 0 matrix
Criteria C1 C2 C3 C4 C5 C6 C7 C8 C9
Criteria C1 C2 C3 C4 C5 C6 C7 C8 C9
Table VIII.
Computation of Dk 0.1865 0.0785 0.2239 0.1105 0.1407 0.0857 0.0782 0.1245 0.0946
vectors D and R Rk 0.0713 0.0788 0.1240 0.1410 0.0961 0.0928 0.0930 0.2163 0.2096
0.06
0.0446
0.02
–0.0003
D–R
–0.0147
–0.02
–0.0072
–0.0305
–0.06
–0.0919
–0.10
–0.1151
Figure 1.
–0.14
DEMATEL causal
diagram of criteria 0.10 0.14 0.18 0.22 0.26 0.30 0.34
D+R
C1 = 0.0139
C2
C9
C3
C8
C4
Figure 2.
C7
DEMATEL diagraph
for performance
C5 evaluation of Indian
C6
Railway zones
BIJ Railway zone Ei Fi Pi Rank
23,1
Central (CTL) 0.3864 0.0885 0.2286 4
Eastern (ESTN) 0.5595 0.1465 0.8191 14
East Central (ECTL) 0.5639 0.0993 0.5133 5
East Coast (ECST) 0.5843 0.1404 0.8086 13
Northern (NRTN) 0.4273 0.1392 0.6118 8
92 North Central (NCTL) 0.5132 0.1178 0.5745 6
North Eastern (NESTRN) 0.7096 0.1362 0.9321 16
North Frontier (NFTR) 0.6120 0.1182 0.6957 10
North Western (NWSTN) 0.5328 0.1304 0.6809 9
Southern (STRN) 0.4005 0.0706 0.1276 3
South Central (SCTL) 0.3431 0.0765 0.0970 2
South Eastern (SESTN) 0.5316 0.1381 0.7300 11
South East Central (SECTL) 0.6026 0.1452 0.8626 15
Table X. South Western (SWSTN) 0.5809 0.1362 0.7770 12
Ei, Fi and Pi values Western (WSTN) 0.2946 0.0806 0.0660 1
for 16 railway zones West Central (WCTL) 0.4779 0.1251 0.5796 7
and the compromise ranking of 16 Indian Railway zones. The candidate railway zones
are then arranged in ascending order, according to their Pi values. The best performer
amongst these 16 Indian Railway zones is Western zone, followed by South Central
zone. North-Eastern zone is identified as the outperformer in this evaluation process.
Using VIKOR method, the compromise ranking of 16 railway zones is thus obtained
as WSTN WSCTLWSTRNWCTLWECTLWNCTLWWCTLWNRTNWNWSTNW
NFTRWSESTNWSWSTNWECSTWESTNWSECTLWNESTRN. From the decision
matrix of Table III, it is observed that Western zone has the maximum route distance of
6,182 km amongst all the competing railway zones. It had also carried the second
highest number of passengers (17,052,992) in the year 2010-2011 and it has also 619
major railway stations in its entire route, which is just next to Northern zone (812). It is
also observed that during the year 2010-2011, there were only six major accidents/
derailments occurred in this zone in which altogether 20 persons were seriously
injured/died. The smaller values of these two non-beneficial criteria may be the reasons
behind Western zone taking the top position in the ranking list of railway zones. On the
other hand, the high-operating cost ratio of 197.32 (where the average is approximately 93),
and smaller values of number of passengers carried (3,090,168), number of major stations
(224) and number of staffs (55,785) drive North-Eastern zone to be the outperformer in the
context of Indian Railways scenario.
The Pareto analysis results based on Pi values of 16 Indian Railway zones are
presented in Figure 3. It is observed from this figure that Western, South Central,
Southern and Central zones can be considered as the benchmarks for other railway
zones so as to improve their performance.
At present, the Railways Ministry is ignoring the fundamental changes required to
transform Indian Railways to suit the twenty-first century demands. The way forward
is to dismantle the archaic organizational structure set up of the nineteenth century and
establish a more efficient mechanism to operate all its zones. Indian Railways must
reach the remote and underserved areas of the country to bring them into the national
mainstream of development. It will accelerate economic growth, open up new avenues
for employment in the primary, secondary and tertiary sectors, and also promote
1.0000 100 Performance
0.9000 evaluation
0.8000 80 of Indian
0.7000 Railway zones
Cumulative %
0.6000 60
Pi value
0.5000
93
0.4000 40
0.3000
0.2000 20
0.1000
Figure 3.
0.0000 0
7 13 2 4 14 12 8 9 5 16 6 3 1 10 11 15 Pareto analysis of
Railway zone Pi values for 16
railway zones
Pi value Cumulative %
geographically and socially balanced growth. By carrying more people and goods than
other modes of transport, it can help protect the environment while promoting balanced
development. It shall provide efficient, affordable, customer-focussed and
environmentally sustainable integrated transportation solutions. The reach and
access of its services would be continuously expanded and improved by its integrated
team of committed, empowered and satisfied employees and by use of cutting-edge
technology. Advanced technologies in all spheres, including track, rolling stock and
signaling would be used to make railway operations free of accidents, be it derailment,
collision or fire on trains. High-quality training to improve the skills of employees to
manage new technology is critical, and steps would be taken to provide the same. In the
coming years, not a single-level crossing in the country would remain unmanned or
unprotected. Thus, based on the DEMATEL-VIKOR method-based analysis, it can be
revealed that Indian Railways must address four strategic goals, i.e. inclusive
development, both geographically and socially; strengthening national integration;
large-scale generation of productive employment; and environmental sustainability.
It is also advised that each railway zone would be the final decision maker on
operation, management and development of its own zone. For instance, each zonal head
can decide about constructing stations and platforms, adding or removing trains,
upgrading rolling stock, regulations for safety, cleanliness and hygiene. Each zone also
would prepare an annual budget to govern itself and its divisions. This would enable
individualistic growth of each zone based on its requirement. The Indian Railways should
review the performance of its zones annually and provide feedback for improvements.
Periodic review and modification of policies are also required to facilitate further
development of railway. These suggestions are indicative of the railway reforms to
revamp and modernize Indian Railways into a world class mode of transportation to cater
to the needs of the twenty-first century and to support the inclusive growth of the nation.
6. Conclusions
The adopted combined methodology provides a systematic approach in apprising and
evaluating the performance of 16 Indian Railway zones and hence, may become
BIJ a valuable tool to the decision makers/railway administrators. Using DEMATEL
23,1 method, the interaction relationship and impact level between different selection
criteria are analyzed. It is also used to analyze the causal relationships and interaction
influence levels between those criteria. Based on the DEMATEL results, it becomes
apparent that route distance plays a pivotal role in performance evaluation of Indian
Railway zones and it has the greatest influence on the remaining criteria. On the other
94 hand, total expenditure and operating cost ratio are significantly influenced by the
other criteria. The VIKOR method aggregates the performance score under different
criteria into an overall performance value of each railway zone. However, the evaluation
criteria need to be selected carefully as they play a crucial role in performance evaluation
and subsequent ranking of the railway zones. Although, Indian Railways has constantly
been innovating new ways to make travel easier for passengers across the country by
connecting remote areas while providing luxurious comforts, still based on these results, it
may be recommended that the railway administrators should focus on developing proper
railway infrastructures for improving passengers’ satisfaction and comfort during their
travel. This combined approach is quite generic in nature and can be applied for resolving
the problems of evaluating the performance of other service sectors too.
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Corresponding author
Dr Prasenjit Chatterjee can be contacted at: prasenjit2007@gmail.com
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